DURING 2017, ANGELA TUITION EXPENSES WERE 4000. OF THIS AMOUNT 1000 WAS PAID FROM ESA SET UP BY PARENTS. THE PARENTS KNOW WANT TO CLAIM OPPORTUNITY CREDIT. WHICH STATEMENT IS CORRECT

EDUCATION CREDITS CANNOT BE CLAIMED IN YEAR IN WHICH THERE HAS BEEN A TAX FREE DISTRIBUTION FROM A COVERDELL FOR THAT STUDENT

IF PARENTS WANT TO TAKE THE LEARNING CREDIT THEY MUST WAIVE TAX FREE TREATMENT FOR THE COVERDELL ESA DISTRIBUTION USED TO FIGURE THE CREDIT

IN ORDER TO MAINTAIN THE TAX FREE TREATMENT THE 4000 MUST BE REDUCED BY THE 1000 COVERDELL ESA DISTRIBUTION

THE COVERDELL ESA AND EDUCATION CREDITS ARE SEPARATE PROGRAMS, NO ADJUSTMENTS NEED TO BE MADE TO THE TAX FREE COVERDELL DISTRIBUTION OR QUALIFIED EDUCATION EXPENSES AMT